Personal Insurance

• Car & Motor
• Home Insurance
• Student Insurance
• Travel Insurance
• Landlords
• Life Insurance
• Mortgages
• Remortgages
• First Time Buyers
• - FAQ's
• Fixed Rate Mortgages
• Flexible Mortgages
• Tracker Mortgages
• Offset Mortgages
• Interest Only
• 100% Mortgages
• Key Worker Mortgages
• Lifetime Mortgages
• Non Standard Mortgages
• Right to Buy Mortgages
• Bad Credit Mortgages
• Commercial Mortgages
• Buy to Let Mortgages
• → Mortgage Calculator
• → Mortgage Costs
• → Mortgage Guide
• → Mortgage FAQ's
• → Homebuyers Info Packs
• Critical Illness
• Permanent Health

First Time Buyers

Frequently Asked Questions

Who do lenders regard as a 'first time' buyer?
Do I need a deposit as a first time buyer?
How would paying a deposit help?
Are mortgages of 100% and over a good idea?
What is an Agreement in Principle?
Is it dangerous to have lots of credit checks done?
How much can I borrow?
What is the home buying process?
How much will I have to pay upfront?
What if I don't have a deposit?

Who do lenders regard as a 'first time' buyer?

This varies from lender to lender. For many, a first time buyer is anyone who has never been the owner of a property. For others, a first time buyer is someone who has previously owned a home but has been off the property ladder for three years or more.

What matters most is the level of security a buyer can offer against a loan. Obviously, lenders like to feel safe in the knowledge that they will be repaid, and the more you can do to prove this ability, the higher the loan you are likely to be offered.

Do I need a deposit as a first time buyer?

Not always. Mortgages of 100% of the value of the property can be arranged. You might even qualify for a mortgage of up to 125% of the value of the property, or to have legal fees and stamp duty included in the sum you borrow.

How would paying a deposit help?

The ability to pay a deposit is always useful, as it reduces the overall amount of your loan and therefore reduces the interest you will pay over the loan period. A deposit can also increase the number of mortgage options open to you, and therefore help you find a more competitive deal.

Are mortgages of 100% and over a good idea?

You need to be aware that if you borrow more than the value of the property, you may find your loan hard to repay if you had to sell soon after the start of the mortgage period. The outstanding loan could be more than the value of the property. But over the long term, provided you make regular repayments and the property increases in value, you should create equity - i.e. your property will be worth enough to repay your loan and may also leave you with a profit.

What is an Agreement in Principle?

An 'Agreement in Principle' will usually involve the lender performing a credit check and address check on you. If you pass their initial criteria, they will normally supply you with a certificate which you can show to an Estate Agent as proof that you have passed the lenders initial checks.

One thing to bear in mind is that an Agreement in Principle is not a guarantee that the lender will lend to you as it is always dependent on a suitable valuation of the property you wish to buy and on you being able to provide satisfactory proof of your address and income.

Is it dangerous to have lots of credit checks done?

Each time you have a credit check done it leaves a 'footprint' on your credit file which in itself isn't a huge problem, however, having too many credit checks done in a short space of time will dangerously lower your credit score. Always speak to your Independent Mortgage Adviser first as they will suggest the right course of action based on your personal circumstances. You should only ever need to have one credit check done when your Independent Mortgage Adviser arranges an 'Agreement in Principle' for you.

How much can I borrow?

This depends entirely on the lender as they will all have different rules on how much they will lend.

Again, it would be advisable to speak to an Independent Mortgage Adviser as they will be able to arrange an 'Agreement in Principle' that will normally state the maximum loan amount available to you based on your current earnings.

It is important that you have a clear figure in your mind of what is realistically affordable to you each month.

You must remember that it is not just the mortgage payment that you will have to pay each month, there will also be your utility bills, council tax and other household expenditure.

Your Independent Mortgage Adviser will help you work out how much you can afford to pay each month. There is little point in being a home owner if you cannot afford to go out and enjoy yourself every now and then or even worse, have your home repossessed because you have failed to meet the repayments.

What is the home buying process?

• Your first point of call is to arrange the Agreement in Principle as mentioned earlier.
• You will need to find a suitable property.
• The estate agent will ask you how much you are willing to offer to buy the property.
• Once your offer is accepted you will need to contact your Independent Mortgage Adviser so that he/she can start arranging your mortgage for you.
• You will then need to find a solicitor that will arrange all of the legal work for you. It is recommended to get a few quotations from a handful of solicitors as their fees do vary quite considerably.
• Once your mortgage application has been signed off (underwritten), an 'Offer Letter' will be sent to you which states the terms and conditions of the mortgage. Sometimes you will need to sign the offer letter to show that you have accepted their terms.
• Your solicitor will then arrange for you to 'Exchange Contracts'. Once you have exchanged contracts, both you and the vendor (the seller) cannot pull out of the sale.
• The final stage is for the completion date to be set by the solicitor.

How much will I have to pay upfront?

The mortgage lender will usually charge an Arrangement or Booking fee and Valuation fee. This are either paid up front or can sometimes be added into the loan. Some lenders offer cash-back as an incentive but be wary as there will usually be extra conditions if you take the cash-back.

Legal fees are usually paid to your solicitor on completion of the mortgage however some fees need to be paid up front such as Land Searces. Your solicitor will advise you on his/her fees from the very start. These will include Land Searches and Stamp Duty (if applicable) plus any deposit you wish to pay.

What if I don't have a deposit?

Your Independent mortgage adviser will help you find a suitable mortgage product that does not require you to pay a deposit although the interest rates are usually a little higher on 100% mortgages.

Remember. The higher the interest rate. The higher the monthly payment will be.